Welfare Reform and Work Bill

Helen Goodman Excerpts

Monday 20th July 2015 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to follow the hon. Member for Gloucester (Richard Graham). Unfortunately, the £640 million that is being saved on ESA is not going to go to work-related activities; it is going to go to the Chancellor of the Exchequer.

In the last Parliament, I had the privilege, along with my right hon. Friend the Member for East Ham (Stephen Timms), who made a characteristically excellent speech, to take the Child Poverty Act 2010 through, and we had all-party support at that time. It is therefore very disappointing that this Government are abandoning that Act and even the aspiration to end child poverty. Furthermore, it is ridiculous of them to attempt to airbrush the whole concept from the statute book.

I do not believe this Government have a mandate for the changes they are making in this Bill. Throughout the election campaign the Tories refused to say how they were going to save £12 billion from the welfare bill, because they knew that the measures would be unpopular and it would hit them in the ballot box. Indeed, the Prime Minister went on national television to say that he would not be cutting tax credits. In any case, the truth of the matter is that 9 million people did not vote Tory on 7 May. The most obnoxious part of the Bill is the proposal to cut tax credit support for families with more than two children. When we were in government, Labour had a principle that Every Child Matters, and I believe that was the right principle.

[Heidi Allen]

Will my hon. Friend give way?

--- Later in debate ---

[Helen Goodman]

I will. [Interruption.]

[Heidi Allen]

We are friends, I believe. I think we are all friends in here—I hope we are.

[Heidi Allen]

Thank you. I do not have children, so I often tread carefully in these sorts of debates because I do not want people to point the finger and say, “Well, you don’t understand.” But I am certain of one thing: a choice between one, two or three children is a choice. If you cannot afford it, why should the taxpayer subsidise you? Can she answer that? [Interruption.]

[Helen Goodman]

As my hon. Friend the Member for Warrington North (Helen Jones) described, people’s circumstances can change. People do not have a complete and perfect forecast of how their life is going to pan out, which is why we need a safety net. The problem is that a child living in a family with more than two children is 50% more likely to be living in poverty than the average. Some 35% of the children in this country who live in poverty live in those families, so these measures are precisely targeted at those children. The measures will increase the number of children affected and deepen the poverty they face.

[Richard Graham]

Does the hon. Lady recognise The Children’s Society’s comments? It said it supports plans to add additional reporting requirements on parental employment and educational attainment as these are important in contributing to children’s welfare. I know she would say that these were additional, not a substitute, but does she recognise that they are important measures to study?

[Helen Goodman]

I used to work for The Children’s Society and it does some excellent work. What I am concerned about tonight is that rather like a child who has broken a toy and hides it under the bed, the Chancellor tried to hide the impact of this Budget by not presenting the distribution tables in the normal and proper way after the Budget. Fortunately, the IFS told us the truth, which is that people at the top are losing 0.2% of their income and people at the bottom are losing 7% of theirs. This is a phenomenally regressive Bill and a very regressive Budget. It will take £10 million out of the local economy every single year in my constituency. As hon. Members have said, one of the worst things about the tax credit cuts is that they affect in-work families, who are struggling in low-paid jobs to do their very best for their children. They are being given what my hon. Friend the Member for Nottingham East (Chris Leslie) has called a “work penalty”. The Bill worsens work incentives. A top-rate taxpayer who earns an extra pound can take home 55p whereas a lone parent on tax credits can take home only 25p.

The Chancellor believes that his rabbit—a rise in the national minimum wage—solves the problem. Of course we all welcome that increase, but it does not solve the problem. It does not compensate by the right amount, it does not compensate enough people and it does not compensate at the right time. Overall, 13 million people are losing from these measures. Some 3 million are losing £1,000 and 2.7 million people will gain from the national minimum wage. The mismatch is shown by chart B3 on page 208 of the report by the independent Office for Budget Responsibility. It says something that surprised me and is very pertinent:

“around half the cash gains”—

from the increase in the minimum wage—

“may accrue to the top half of the household income distribution”.

It shows that people at the bottom gain less than £600 and those at the top gain more than £1,000. Furthermore, in evidence to the Treasury Committee last week, it told us that only 14% of people in the bottom decile receive the national minimum wage.

I have concentrated on the issue of children and tax credits, but I have also had many messages from carers, sick and disabled people, and lone parents who are worried that the 30-hour condition is coming in before the extra childcare provision is in place. There are so many serious issues here, and it is a shame that we do not have time to address them.

Recently, Professor Amartya Sen said:

“Democracy should be about preventing mistakes through participatory deliberations, rather than about making heads roll after mistakes have been made.”

He is right. I have been in this House for 10 years, and I have never voted against my party’s Whip. I think that my right hon. Friend the Member for East Ham made a good case for the Front-Bench amendment. I shall vote for the amendment, but there are so many issues in this Bill that are deeply worrying that I cannot avoid going into the No Lobby against it tonight.

[Several hon. Members]

rose—